Besides, plenty of homes purchased as primary residences eventually get turned into rentals. But in your case, it was clearly a second home to begin with.
If you're worried that they might somehow foreclose or penalize you, don't worry. They are likely to apply somewhat more stringent criteria to the property than if it were your primary residence. However, they already know that your primary residence is in Maryland and that the Florida house is a second property.
A bigger concern is just that you won't have enough equity in the Florida property to refinance. That depends not only on what's happened to property values, but how much you put down in the first place.
But as for them asking for Schedule E--don't sweat it. Just provide them the documents and see what happens.
Hope that helps.
I believe you are allowed to rent out the house for a few weeks a year without having to consider it an "investment property". If you rent it out consistently and it shows up on your Schedule E - it will be subject to the rates, guidelines and fees for an investment property.
I think that one of the previous answers was a little blunt - but they are correct. It would be considered fraud only if you KNOWINGLY lied to the bank.
No worries. Follow Don's advice below and furnish the Schedule E. Rates for investment properties are the same as primary and second homes. There will be a surcharge for an investment property of up to 3 points in fee - and they also may require a higher equity stake( Lower Loan to value).
You MUST do it as an investment property.
If you try to do a 2nd home, they can turn you over the authorities for criminal prosecution.
Did I scare you enough? Sorry if I did, but this is reality. This is part of the reason we are in the mess we are in....because people lied and then the market for these loans exploded.
Believe me, they will find out...